Supply chain management and efficiency

Supply chain management plays a central role when you want to get ahead of the competition.

An efficient supply chain ties directly into concrete operational goals:

• less variation in production
• a better cost structure
• less tied-up working capital
• lower risk
• better decisions, because they are based on data

If you get better at one or more of these, you can get shorter lead times, better use of capacity and a smoother flow through production.

What does efficiency mean in the supply chain?

Efficiency is about how much work it takes to complete a process, and how well you use the resources you have.

But efficiency still has to benefit the end customer. A process isn't really efficient if it is optimized internally but delivers the wrong result.

Just in time needs better flow

In the end, just in time is about productivity.

With higher efficiency, you can:

• produce in shorter intervals
• keep less work-in-progress inventory
• get more even takt times
• keep materials moving through the factory

That also means factory layout and order on the floor matter. If goods, materials or work in progress get in the way of the flow, it is hard to keep a high pace.

Three practical suggestions

Here are three concrete suggestions:

1. Get more visibility into the supply chain Track components from the supplier and through production. That makes coordination easier, and everyone can see what is going on.

2. Communicate better Use regular meetings for planning, follow-up, evaluation and decisions about improving your processes.

3. Build quality improvements on data Use real production figures to judge what a change is worth, instead of guessing.

A practical first step is to log data from your machines. Then you can measure availability and find the waste, and you avoid investing in equipment you don't need.